MEXICO CITY (Reuters) – Mexico is eyeing broadening tax incentives set out in a recent “nearshoring” decree to companies that relocate operations to the country, Economy Minister Raquel Buenrostro was quoted as saying in a newspaper interview published on Thursday.
An expansion of the decree published in October, which benefits 10 sectors, could include new incentives for production that remains in Mexico, the minister said.
“We are promoting the strengthening of the national supply chains as an economy, but I think we can be even more ambitious to generate the incentive for new investments and not limit it to exports, but to strengthen national production too,” Buenrostro said in the interview with newspaper El Financiero.
The United States had concerns the decree could be discriminatory against other countries, but Mexico was willing to modify it in order to avoid conflict, she said.
“The modification serves to expand the spectrum that also encourages new investments, and that it is not only for maquila (assembly plants), not only for export industries, but also be for national production,” Buenrostro added.
Her comments come as President Andres Manuel Lopez Obrador is due to meet with U.S. President Joe Biden on Friday on the sidelines of the APEC Economic Leaders’ forum in San Francisco where they are expected to discuss migration and trade.
Mexico’s government expects nearshoring – the trend of locating manufacturing capacity in Mexico, closer to the U.S. market, rather than in Asia – to add up to 1.2 percentage points to growth, which is expected to reach 3.5% this year.